United Kingdom Bitcoin Laws

Bitcoin and other cryptocurrencies are treated as ‘private money’ in the United Kingdom. This means if you exchange bitcoins for foreign currencies, notably the Stirling in the UK, no Value Added Tax (VAT) will be charged because of the value of the bitcoins.

VAT, which is known as Goods and Services Tax in some countries, is expected to be paid to the UK government in the same way a supplier would pay tax on a good or service paid for in a centralised currency. This means that all cryptocurrencies are treated the same as the Sterling in the United Kingdom.
Bitcoin Laws United Kingdom
Like most countries the UK government has been caught off guard by the rapid growth of crypto currencies and as of September 2013 Bitcoin businesses were not forced to sign up with regulators. But this is believed to be under review.

For a time there was a train of thought with British politicians that bitcoins would not be treated as money, but rather single purpose vouchers that would carry a sales tax on any bitcoins sold. But this idea was quashed when the government decided that Bitcoin was not a currency.

The UK now treat Bitcoin like any other form of payment, which means Value Added Tax will be added to any goods or service sold in exchange for bitcoins or any other similar cryptocurrency.

The future of Bitcoin in Great Britain

Great Britain, as of August 2014, has decided to be proactive in its stance on Bitcoin with a panel set up to look at the potential impact of crypto currencies on the British economy.

This review is expected to be completed sometime late in 2014 and may end up providing the framework for stronger regulations on bitcoins and cryptocurrencies in the United Kingdom.

The Isle of Man and Bitcoin

The Isle of Man is self-governing but is owned by the British Crown and its citizens are British.

The Isle of Man, on an economic scale is punching well above its weight, largely through its low tax rates and willingness to regulate gambling on its shores.

While many governments see Bitcoin as a problem, the Isle of Man see opportunity for the population of 80,000. It is a logical step for the Isle of Man to become a champion for Bitcoin considering many of the largest gambling companies in the world set up shop on the tiny island located between England and Ireland.

While it is hard to pinpoint exactly how much money is being poured into Bitcoin by companies around the world, the Isle of Man wants to become a hub for its activities. Recently it hosted a conference called Crypto Valley which aimed at looking to lure in startup bitcoin companies from around the world.

While the government has brought in some small regulations surrounding cryptocurrencies, these are only enough to provide stability, both legally and financially, and don’t stop the innovations that are pouring in through the advent of Bitcoin.

The government in the Isle of Man has even gone as far as to share a vision of a day when you can pay for everything from your car tax to grocery shopping with bitcoin.

The regulations brought into place for cryptocurrencies on the Isle of Man require crypto businesses to register with the government and carry out some due diligence, to stop crimes like money laundering.

However, in comparison to other countries, this makes the Isle of Man one of the most lenient countries in the world.

The Isle of Man plays host to many gambling companies, with the biggest being PokerStars, which employs over 300 people on the Island.

Gambling accounts for over 14 per cent of the country’s economy which is largely down to their proactive stance on it.

They hope this same proactive stance on bitcoins will lead to another boom for their thriving island.